Frequently Asked Questions and Glossary of Terms

Here you will find answers to our most commonly-asked questions as well a comprehensive glossary of the terms that are used when talking about logistics. If you can’t find the answer to your question on this page, please do not hesitate to contact us.

What is a “3PL”?

A third-party logistics (3PL) provider is a company that provides outsourced logistics services to client companies for part, or all of their supply chain management functions. Every 3PL is different. For us, this involves managing inbound freight, customs, warehousing, order fulfilment, distribution and managing outbound freight to our clients’ customers, all while keeping our clients thoroughly up-to-date on the status of their goods.

Which industries benefit from 3PL services?

Any industry can benefit from outsourcing their 3PL requirements. We regularly work with companies in manufacturing, construction, auto, chemical, agriculture, health, pharmaceutical, education, electronics, apparel, consumer products, food and beverage industries. We also partner with a wide range of general retailers and expertly manage their supply chains in respect to both their physical stores and their e-commerce customers.

What size business do you typically provide 3PL services for?

We provide logistics services for a large range of businesses. We have clients with start-up or small business requirements of say 1-2 hours a day through to large organisations who require up to 25 staff working daily on a full-time basis in their peak season.

Can my business save money by using Online Distribution as its 3PL provider?

Yes! As experts in warehousing and distribution, efficiency is at the heart of every warehouse and process within. By absorbing all fixed costs but charging only for what our clients use, as well as “brokering” a significant freight and courier spend, we routinely lower a client’s overall distribution costs whilst providing a reliable service.

What is order fulfilment?

Order fulfilment involves the picking, packing and shipment of inventory. Basically, we store your product in our warehouse until your customer orders come in, then we take your items out of stock (picking), appropriately package them (packing) and send them on their way to the desired business or customer (shipping).

When are orders delivered by?

We can provide different levels of service to suit your needs. We will work with you to align your freight requirements to suit your customers’ requirements.  This ensures the right level of service is provided at the right price, delivering your product at the right time to the right place. We can provide, on request, a detailed dispatch schedule outlining the different delivery times available. In addition to this, our presence in both Christchurch and Auckland provides you with the opportunity to place your stock close to your market ensuring that you have minimal lead times between your business and your customer. We offer point-to-point courier runs through to full container shipments nationally and abroad.

What type of deliveries can you do?

We work with numerous sea, air and road freight partners. We can provide ground transportation via courier or truck and can co-ordinate sea or air freight delivery and pick-up services. We can handle most types of products, parcels, parts, components and shipments.

Where can you distribute products to?

We have several warehouses and distribution facilities located in Christchurch and Auckland. This means we can quickly and easily distribute our clients’ products to their customers anywhere in New Zealand and also internationally.

Can you store and manage dangerous goods and hazardous substances?

We have a facility in Christchurch that is specifically approved for the storage of dangerous goods and hazardous materials, including chemicals. Our employees who are responsible for handling dangerous goods at this facility are fully-trained and qualified in that area.

How safe is my product?

We pride ourselves on our ability to look after your product and treat each item as though it was our own. We ensure that all products are distributed using the appropriate packaging and stickers (i.e. breakable, fragile) as required. We can work with any specific requirements needed to meet the expectations of your customers. In the unlikely event of any damage or loss of your products, we follow a comprehensive claims procedure which is outlined in our standard terms and conditions.

What insurance cover do we have for products stored in our warehouses?

All goods held by us remain at their owner’s risk. It is your responsibility to ensure you have sufficient insurance cover for your products at all times. We do hold significant Bailees Insurance should we become legally liable for any loss, damage or destruction of goods caused by our negligence. We are very happy for your insurer to inspect your products at any of our locations as required to ensure you have appropriate cover at all times.

What are your back-up and contingency plans for unforeseen circumstances or business disruption?

Contingency planning is an integral part of our culture and our focus on customer service and safety. We conduct a self-risk management assessment on a quarterly basis and review our plans regularly to ensure they are still relevant and ‘best practice’ in the current environment.  This includes disaster recovery planning, health and safety procedures, building security systems and electronic information security. We pride ourselves on our flexible approach and ability to respond to disruption not only when a disaster occurs, but daily as a response to unforeseen events that arise outside of our control. We operate from multiple warehouses and distribution facilities across New Zealand which decreases our risk during an unforeseen event and lessens your business’ exposure. Our risk management team is responsible for implementing our contingency plans when required, ensuring the safety of our employees and preserving our assets, whilst restoring ‘business as usual’ processes as quickly as possible in the circumstances. Our aim is always to minimise disruption and our staff have always shown their willingness to go above and beyond to achieve continuity for our clients and their customers. Our computer systems are backed up regularly and our computerised freight systems can operate manually if required.

Do you accept ‘one off’ type contracts?

Our on-call labour rates are provided to you with our service quote. Any unscheduled or additional work that you instruct us to carry out would be itemised on a ‘miscellaneous labour’ form and attached to your monthly invoice. We do not carry out any work without specific pre-authorisation from you. Any ongoing, regular low-skill work may attract a reduced labour rate or be incorporated into our contract with you as a piece rate.

What are the arrangements for pallets?

We use Chep pallets for transfers onto our transport suppliers and traditionally for receiving inventory from clients. We use our own pallets for internal storage. These pallets are available for product storage where full pallet lots and layers are not sent out. They are available at a reduced rental rate from Chep.

How do you determine which warehousing facility is most suitable for me?

We like to get to know you and learn about your business and product(s) so that together we can make the right decision regarding the storage and distribution of that product. We need to understand who your customers are, the frequency and quantity of their orders, where they are located and your preferred distribution methods. We also need to understand any special requirements from a storage and handling perspective. Once we have this information we can determine which of our warehouses will best fit your needs. The factors we take into consideration are the location and type of facility that is best suited to your product, the size and quantity of your product, the pick frequency and any particular labour force requirements. We have a suite of physical (and virtual) offices situated within or alongside them which you can rent if you prefer to be located in close proximity to the warehouse.

What are your warehouse storage conditions like for my stock?

All stock stored with us will be kept in a secure, clean and moisture-free warehouse. Many of our warehouses have been specifically-designed and built for us so we can achieve optimum conditions such as maximising natural light and minimising windblown dust.

What security systems do you have in place?

All our office and warehousing facilities have 24 hour security monitoring and our own covert surveillance equipment.

What is your confidentiality policy?

We value honesty and confidentiality when it comes to our clients and pride ourselves on our excellent honesty record. Our staff are familiar with client confidentiality issues and the signing of a confidentiality agreement would present no difficulties. We also have a ‘Confidential Information’ section in our Individual Employment Agreements which all staff must sign. We understand the importance of confidentiality when it comes to your competitors and we would always endeavour to inform you of any potential risks or conflicts that present themselves through the use of any of our shared resources (staff or warehouse sites).

What staffing do you offer?

Like most companies, our people are our greatest asset and come from a variety of backgrounds with specialist knowledge and skills.  Each warehousing facility has a site manager who is your first point of contact in relation to your product and customer activities. The site managers look after a team of dedicated staff who are either full-time, part-time or casual employees. We invest heavily in development and training so our employees feel engaged, motivated and solution-focused.

What are your invoice terms and conditions?

Please contact us to request a copy of our standard Agreement for Services. Our invoice structure is simple to understand, transparent and detailed. Payment for our services is due within 20 days of the date of our invoice.

What are your arrangements for freight?

We outsource our combined client freight requirements to a selection of specialist courier and long-haul carriers. Due to the large amount of freight transport we use, we benefit from excellent purchasing rates and priority service. We are able to pass on our significantly-reduced ‘bulk buying’ prices to you and can provide you with a freight rate schedule on request.

Can you cope with our unexpected business growth?

We have opened 1-2 new warehouses every year for the last 29 years.  We love to  grow with our clients, and accommodating your growth by continuing to offer flexible solutions to meet your logistics needs is how we operate. We understand that your business needs will fluctuate at various times due to seasonal requirements, general growth, additional routes to market or a downturn in the economy. We have complete flexibility to help you achieve your strategies no matter which way your volumes move.

How do you manage our stock?

Our powerful and industry leading Warehouse Management System has been tailored to our specific needs, which is critical for best practice inventory management and real-time visibility. We have partnered with 3PL Central to ensure that our clients’ specific and changing needs can be accommodated with minimal cost and delay. Integrations are possible via EDI, with most popular e-commerce shopping carts and other business systems, all in real-time. Our in-house experts will work with you to ascertain the best set-up for data flow between your company and ours. This will be determined by your internal business requirements, existing IT infrastructure and other relevant system information.


Below is a list of terms that will be used frequently during our interactions with you:

Activity Based Costing (ABC)
Costing method that breaks down operational costs into specific areas of activity called cost drivers, to measure product processing times and their related expenses. Often, time and motion studies are part of activity-based costing, to help determine the cost of performing an operation or to help establish a baseline for improving operational efficiency.

Accuracy Audit
Verification of inventory accuracy, reconciling physical counts of inventory with the inventory data

Administration Duties
Administration tasks requested by a client that sit outside of the Agreed Services

The physical passageway in a warehouse for transit of material handling equipment (such as forklifts, pallet jacks) and people. Aisle also is the location designation of a product on a side of an aisle.

In inventory management within a 3PL operation, allocations are based on actual demand created by sales of a specific item. A standard allocation is the total quantity of a specific item needed for either a specific order or for a specified time period. A firm allocation reserves the inventory for the specific order or time period designated.

Ambient Storage
The air temperature (not controlled or manipulated) within the operational area of the warehouse

ARA (Annual Rate Adjustment)
The method of rate adjustment upward or downward by an amount that is reflective of the then current market conditions

ASN (Advanced Shipment Notifications)
Advanced Shipment Notifications are used to notify a customer of a shipment. An ASN will often include purchase order (PO) numbers, stock keeping unit (SKU) numbers, lot numbers, quantity, carton number, and pallet or container number. An ASN can be on paper, but most are via electronic notification, principally via EDI (Electronic Data Interchange). Advanced shipment notification (ASN) systems are often combined with bar-coded compliance labelling which allows the customer to receive the shipment into inventory through the use of bar-code scanners and automated data collection (ADC) systems.

ATF (Approved Transitional Facility)
Accredited site and person (Ministry of Primary Industries) to receive and inspect import containers

AWB (Air Waybill)
A waybill is a document issued by a carrier or forwarder giving details and instructions relating to the shipment

An order that has passed its required shipping date due to product being out-of-stock but remains “live”

Batch Picking
A method of order picking in which all orders are grouped into small batches. All the orders in the batch are then picked in one pass for efficiency.

BACC (Biosecurity Authority Clearance Certificate)
A BACC is a certificate issued by MPI (Ministry for Primary Industries) stating whether freight is released or if it requires MPI inspection or other action to be taken before final release is given

A specific area of a warehouse designated for activity or for storage of specific goods

The process of comparing a measurement to a benchmark. External benchmarking compares internal measurement to that of an external source, such as comparing how fast a competitor can process a complex order compared to our own operation. Internal benchmarking seeks to compare internal measurements to historic internal measurements. Operational efficiency, picking accuracy and inventory accuracy are commonly used for benchmarking by 3PL’s, to increase efficiency and to improve quality control.

A physical storage container to store multiple units of the same SKU. Bins can be of corrugated cardboard, plastic or metal. Bin can also be the storage location or slot of the product.

Blind Count
A system in which inventory is counted by a person without knowledge of how much inventory is supposed to be available. Blind counting helps avoid biasing the results toward expected inventory levels instead of determining actual counts.

BOL (Bill of Lading)
A document issued by the carrier to the shipper as a contract of carriage, it must be presented at destination for the goods to be released. It is a document of title for the goods.

B2B (Business to Business)
Activities directed from one business toward another business. B2B third party logistics and fulfilment activities include warehousing products and processing orders to other businesses on behalf of a client. Some examples include order processing and shipment of replacement parts to service departments, manufactured products to distributors, consumer goods to retail stores or distribution centres.

B2C (Business to Consumer)
Activities directed from a business toward consumers. B2C third party logistics and fulfilment activities include the receipt, storage, picking and shipping of consumer goods. Order activity is usually generated through Ecommerce channels such as social media and website sales.

A warehouse configuration where goods are safely stacked on top of each other for efficient storage and quick retrieval

The transporter of goods from one location to another. The carrier is responsible for the goods while under its custody.

A corrugated box

A container (usually a corrugated box) that contains multiple units of an item

Chargeable Weight
Freight charges are calculated on the weight of the shipment. This can either be the actual gross weight or the volumetric weight – whichever is greater.

The pre-eminent pooling service company in Australasia hiring pallets, crates and containers

Commencement Date
The mutually agreed calendar date when the agreement begins, as specified by the “Terms and Conditions of Agreement”

Commercial Invoice
A commercial invoice is a document used in foreign trade. It is used as a customs declaration provided by the person or corporation that is exporting an item across international borders.

The end recipient of an order. For B2B shipments, the consignee might be a retail store or another business, while for B2C, the consignee would be a consumer.

Bringing together items, kits or consignments to go to the same destination, for an economically efficient outcome

Consignment Inventory
Inventory that is in the possession of the customer but is still owned by the supplier. Consignment inventory is used as a marketing tool to make it easier for a customer to stock a specific supplier’s inventory. The customer pays for the inventory only after it is resold or consumed.

In supply chain management, containers are standardised metal compartments for intermodal transportation of products. Standard external dimensions for containers are a width of 8 feet, and a height of either 8.5 feet or 9.5 feet, and lengths of 20, 40, and 45 feet.

Count Frequency
The number of times per year an item is counted. Count frequency is used to calculate cycle count period. See also cycle count period.

Cross Dock / Cross Docking
Warehouse configuration, usually for palletised goods, in which arriving items are sorted from one dock to be dispatched across the warehouse floor to another dock to be shipped out

Cycle Count
Any process that verifies the correctness of inventory quantity data by counting portions of the inventory on an ongoing basis. In other words, any process that uses regularly scheduled counts but does not count the entire facility’s inventory in a single event.

Cycle Time
The time from start to finish of a specific task or group of tasks. Cycle time is an important measurement for benchmarking, budgeting and staffing.

Dangerous Goods
Goods that could be harmful to people and the environment and may require special handling procedures and controls

A collection of data organised in fields, records and files for the purpose of easily retrieving information. In 3PL operations, databases keep track of individual B2C and B2B orders, inventory, financial transactions, shipping information and many other logistical elements. Databases are usually computerised. Some popular database programmes are MySQL, Microsoft SQL Server, Oracle, SAP, FoxPro, and FileMaker Pro.

Dead Stock
Product that has not had any turnover and is sitting idle in the warehouse

Declared Value
The value of the goods declared to the carrier by the shipper for the purpose of determining charges or of establishing the limit of the carrier’s liability for loss, damage or delay. It is also the basis for possible applicable valuation charges (air cargo).

DC (Distribution Centre)
A centralised location at which products and shipments can be stored and consolidated and combined for shipment to individual stores, businesses or consumers.

Demurrage (Export)
The time between when the loaded container is delivered to the port to when the container is loaded on the vessel. Shipping lines allocate a set amount of time for this to be done. Once this allotted time is up charges will apply per day thereafter.

Demurrage (Import)
The time between when the container is unloaded from the vessel to the pickup off the wharf. Shipping lines allocate a set amount of time for this to be done. Once this allotted time is up charges will apply per day thereafter.

Detention (Export)
The time between when the empty container is taken to the customer to its return to the port full. Shipping lines allocate set amount of time for this to be done. Once this allotted time is up charges will apply per day thereafter.

Detention (Import)
The time between when the full container is taken from the port to the time is it returned empty. Shipping lines allocate a set amount of time for this to be done. Once this allotted time is up charges will apply per day thereafter.

Delivery in full on time. A measure of performance for transport/logistics providers

Drop Shipping
The procedure in which products purchased from a retailer are shipped to the consumer directly, either by the manufacturer or a third-party fulfilment (3PL) house. In some instances, B2B products that are shipped directly to retail chain stores, bypassing distribution centres, are also called drop-shipped orders.

Packing materials used to prevent a product from moving within its package, or for preventing packages or pallets from moving within a trailer or in the hold of a ship. Examples of dunnage include airbags, foam peanuts, other foam products, wadded paper, and closed-cell plastic wrapping.

Electronic commerce. Generally, refers to automated online commerce in which the end user of a product or service transacts the purchase electronically over the Internet via an e-commerce website or social media platform. An e-commerce fulfilment provider specialises in importing such orders into its WMS and then handling all picking, packing, and shipping operations, in addition to providing ongoing customer service.

EDI (Electronic Data Interchange)
Sometimes called Electronic Document Interchange. A computer to computer exchange of business transaction data following globally standardised protocols. Most business to business (B2B) interchanges are now electronic. Many commercial operations rely on EDI to order merchandise, receive advanced shipping notices (ASN’s) and to be invoiced by their vendors. Third-party logistics providers often specialise in processing EDI orders on behalf of their clients to make the whole operation seamless.

FAK (Freight All Kinds)
Full container load with a combination of freight from different shippers

FCL (Full Container Load)
A full shipping container which will generally be either a 20 foot or 40 foot container

FEFO (First-Expiry, First-Out)
Inventory management system where the product with the oldest expiry date is the first product out. This system helps ensure that soonest products to expire are shipped first.

FAF (Fuel Adjustment Factor)
Also known as variable fuel surcharge, FAF is the amount that freighting companies apply on bills based on the varying price of fuel

Fulfilment operations specialising in processing e-commerce orders

FEU (Forty Foot Equivalent Unit)
This refers to a standard 40 foot container

FIFO (First-In, First-Out)
Inventory management system where the first product into the warehouse (the oldest) is the first product out. This system helps ensure that the oldest batch shipments are shipped first. Almost all products on a batch system, perishable products and items with a limited shelf life are shipped on a FIFO basis.

Fill Material
Type of dunnage including loose fill (packing peanuts), paper, bubble wrap, foam, and air pillows

Food Safety National Programme
A programme developed and assessed by the Ministry of Primary industries ensuring food safety hazards are identified and controlled within the activities of the business

FTP (File Transfer Protocol)
File Transfer Protocol is a computer communications protocol for file transfer across a network. FTP applications are computer programmes that support such file transfer, usually across the Internet.

FTP Site
A site set up on a computer server using file transfer protocol (FTP). For B2C e-commerce, many websites are designed to store orders at an FTP site for later downloading by the third-party logistics provider. FTP sites can also be used to store databases or reports supporting the clients of e-fulfilment 3PL’s.

The activity of processing a customer shipment from the warehouse shelf to the end receiver

Fulfilment Rate
An actionable metric indicating the percentage of lines on orders that are fulfilled on the first shipment

Gross Weight
The total weight of a shipment, including all the tare such as dunnage, packaging and the pallets

Hand Insertion
The process of picking and packing shipments (or combining multiple products) by manual, human-driven processes. Hand insertion is largely utilised when fulfilling complex product combinations with variable sizes, weights or shipping configurations.

Labour involved in moving goods, receiving the goods at a warehouse, verifying its cargo, moving the product to its storage location, then the subsequent labour in picking, packing and preparing the products for outbound shipment

Hazardous Goods
Goods that could be harmful to people and the environment and as a result require special handling procedures and controls

High-Density Storage
Refers to palletised storage in which the pallets of materials are stored more than one-pallet deep from the aisle in a warehouse. High-density storage is best suited for long-term storage of relatively inactive merchandise.

Initial Term
The first time period covered under the Terms and Conditions of Agreement at the end of which the agreement will either be renewed or terminated

Inventory Accuracy
The degree to which inventory quantities in the computer database agree with the actual physical inventory in the supply chain

Item Number
The identification number assigned to an item. Also called the part number, product number SKU number or SKU.

Just-In-Time (JIT)
Inventory management in which materials arrive “just in time” for final preparation and shipment. JIT fulfilment optimises warehouse space, and reduces inventory holding costs, but requires excellent supply chain management (SCM) skills, to ensure that all components necessary to ship the products arrive in warehouse just in time for final kitting and shipment.

KPI (Key Performance Indicator)
In Third-Party Logistics (3PL) this is a measurement of an activity that is important to the success of the business. KPI’s can be applied to shipping and receiving times, inventory accuracy, order picking accuracy, labour cost-per-man-hour versus productivity, warehouse-space utilisation, compliance with required delivery dates and times, etc.

The process of preparing an order for shipment. Kitting can involve light assembly, or the picking and packing of order components and collateral materials into a “kit” or complete set of items ready to ship.

Printed identification codes for packages, usually only on the exterior of packages, cartons, master cartons, pallet loads, and shipping containers. Labelling information can be printed directly onto the exterior of the packaging, but for retail stores using EDI protocols, labels are usually printed on white paper with a thermal barcode printer. To comply with the labelling requirements of the end purchaser and to avoid penalties, labels often have to be of an exact size and positioned within fractions of an inch of a specified corner of a package.

A right to keep possession of property belonging to another person or entity, until a debt owed is discharged

LIFO (Last-In, First-Out)
Inventory management system where the last (most recent) product into the warehouse is the first product to be shipped out. For high-turnover products, this system can save time and warehouse space, since a product can be shipped out before being put away and stored.

Limited Carriers Risk
Legislation that imposes liability on carriers for any unintentional loss or damage up to $2000 for each separate item

Lead Time
Amount of time required for an item to be available for use from the time it is ordered. Lead time usually includes purchase order processing time, vendor processing time, in transit time, customs clearance time (if applicable) receiving, inspection and any pre-packaging times.

LCL (Less Than Container Load)
A shipment that is less than a standard shipping container load

Where inventory is physically stored or staged in a warehouse. It is also the identification number in the database corresponding to the location or “slot”.

MHE (Materials Handling Equipment)
Machinery for handling products and packaging, such as a forklift, pallet jack or pallet wrapper

Inventory system in which once a product has reached the predetermined minimum quantity, enough replacement product is ordered to bring the level up to the predetermined maximum quantity

Narrow Aisle
The variable racking configuration of a warehouse being at its closest physical separation distance

Net Weight
The weight of the product itself after deducting all packaging and tare

Onforward Areas
Geographic locations that fall under the threshold for carriers’ main centres and, as a result, attract additional last mile delivery fees

On-Hand Inventory
The total quantity of an item in the warehouse. Whether or not the item is available to ship depends on its status: whether it is already allocated, is quarantined, is part of a pending order, etc

Open Order
A live order that has not yet been fulfilledOrder Picking
The process of selecting and assembling inventory within a warehouse for shipment as instructed by the purchaser

Other Carrier – Consignment Fees
The recovery of cost involved in consigning and loading freight onto a carrier that has not been arranged by Online Distribution

The way for many companies to remain competitive. For many marketers and manufacturers, outsourcing logistics and fulfilment operations to third party logistics (3PL) or third party fulfilment (3PF) companies allows the virtual “back-room” operations to be handled by a specialist. Outsourcing of warehousing, order processing, customer service, shipping and other fulfilment operations can reduce costs, accelerate shipping times and increase end-customer satisfaction so that the client can focus on growing their company.

Owners Risk
Goods transported outside of Limited Carriers Risk is done so at the owner’s risk, meaning the owner must insure it against loss or damage while it is being transported

A standardised device used for moving and storing freight

Pallet Pick
The act of readying a full pallet of goods for despatch, with no further unit or shipper breakdown

Pallet Hire
The fee charged by hirers of pallets

Pallet Rack
Storage rack, usually of steel, specifically designed to store palletised products

Pallet Space
The space taken up on a truck by one Chep sized pallet, nominally 1.2m x 1.0m x 1.4m high

Physical Inventory
Process of counting the products in a warehouse. See also blind count.

Pick and Pack
To retrieve products from their storage slots in a warehouse so that the products can be packed and shipped to complete the order fulfilment cycle

Pick Accuracy
Accuracy statistics associated with the order picking process

Easily accessible locations that are set up to stage fast-moving products making it more efficient for picking. Majority of the time pickfaces are set up for level 1 locations so that team members don’t have to bring pallets down from higher locations allowing them to pick orders faster.

Pick List
A list of what items need to be picked to fulfil an order

Pick Ticket
A printed or electronic document indicating to a picker or fork lift operator what product or products need to be picked from the warehouse to fulfil an order. The pick ticket will identify attributes such as the product location, product number or bin number, quantity and sometimes lot or batch number

A person responsible for picking products from the warehouse to fulfil a specific order

POD (Proof of Delivery)
A bill of lading or waybill that is signed by the recipient authenticating delivery of the shipment

Point to Point
A carrier who makes a direct route from collection to drop off

The process of moving goods from the time that they are unloaded at a warehouse to the time that the goods are stored in their designated location

QC (Quality Control)
When quantified, QC data can pertain to product compliance with original specifications, the accuracy of inventory control, the correctness of order “picks” and all logistics processes

Shelving in a warehouse for palletised freight (see pallet racks)

The process in which depleted inventory is replaced to increase the on-hand quantities of products by the seller. Machine learning can help anticipate and automate the replenishment process. Also a term used to describe the warehousing process of moving goods from bulk to pick locations.

RF (Radio Frequency)
In warehousing, RF refers to the portable data collection devices that use radio frequency to transmit data to host system for inventory management and reporting purposes

Retail Fulfilment
The bricks and mortar establishments to which the 3PL’s ship product, either directly to the retail locations or to their distribution centres

Reverse Logistics
The processing of returned products, whether from B2B or B2C operations. Reverse logistics often involve customer service, product refurbishing, product repackaging, processing of credits and refunds, restoring product to inventory and the liquidation of product.

The restoration of a product to “as new” condition, according to standards set by the client. Refurbishing can involve examining and testing returned product, replacement of parts and collateral materials, repackaging of products and the return of products to inventory.

RMA (Return Merchandise Authorisation)
Return Merchandise Authorisation (sometimes referred to as RA) is usually a code number issued by the seller of a product authorising the consignee to return the product

SDS (Safety Data Sheet)
Provides procedures for handling Dangerous Goods (DG) and/or Hazardous Goods (HG) in a safe manner. It will confirm how the goods can travel and if they can be loaded with other Dangerous/Hazardous Goods.

Serial Number
Also called manufacturer’s serial number (MSN); a number assigned from a series to identify one specific product unit, and thus is unique to it. Though called a “number”, it can include letters. A serial number is usually printed, etched or stamped onto the product by the manufacturer, but it can be assigned to a product by a distributor or other entity.

Shelf Space
The area taken up by a pick location within warehouse racking

Shelf storage
The picking height level within warehouse racking where goods can be retrieved without the aid of any material handling equipment

Shipping Accuracy
The measure of the accuracy of the shipping process

Shopping Cart Integration
The process of mapping the data fields from the records and files of an electronic shopping cart at a website to an order management systems (OMS) of a 3PL so that the order can be processed and tracked. Shopping cart integration is a mandatory function of B2C 3PL’s.

A portable platform designed to allow a forklift, pallet jack, or other material handling equipment lift, move, and store various loads. A skid is similar to a pallet but does not have bottom deck boards.

The process of consolidating multiple items usually for courier efficiency, and “strapping” together using plastic strip material tightened and adhered by a strapping machine

SKU (Stock Keeping Unit)
An item stored and tracked. Also the number assigned to identify the item itself.

Stock Turn
Number of times inventory is replenished in a year; generally calculated by dividing the average inventory level (or current inventory level) into the annual inventory usage (annual cost of goods sold)

Subsequent Term
The additional period following the expiration of the Initial Term

Supply Chain Management (SCM)
The management of a supply chain of goods as a process from supplier of raw materials or components to the manufacturer, to the distributor, to the wholesale buyer, to the end consumer. Supply chain management involves the actual products moving through the chain, but also the management of all the information (data) about the product, such as its origin, destination, payment status, client ordering history and information about all parties that handle the product in all links of the supply chain. Well-integrated third party SCM process streamlines inventory, increases inventory turnover, improves the speed of completing transactions and increases revenue for the client.

Tail Lift
A mechanical device permanently fitted to the back of van or truck which is designed to facilitate the handling of goods from ground level or a loading dock to the level of the load bed of the vehicle

The difference between the gross and net weight of a product for shipment. Tare can be accounted for in the packaging, filler, pallets, wrapping, and the shipping container.

TEU (Twenty Foot Equivalent)
This refers to a standard 20 foot container

TMS (Transport Management System)
Software designed to efficiently manage the consigning, rating and selection of freight carriers

The term used to define inventory losses in a warehouse facility that are unexplainable, ie, short deliveries that were not picked up, inaccuracies resulting from miscounts, oversupply or undersupply to a customer and data entry errors. Specific exclusions of ullage responsibility are set out in the Terms and Conditions of Agreement.

Value Added Services
Services that a 3PL company will provide to its clients to create value beyond the replacement value of the products. Such services can include light assembly, kitting, picking and packing, sourcing of collateral materials, invoicing, customer service, serviced offices.

Warehouse Duties
Warehouse tasks requested by a client that sit outside of the Agreed Services

Weekly Administration Fee
The recovery of small miscellaneous tasks not captured by activity-based rates schedule

WMS (Warehouse Management System)
Software designed to efficiently manage products within the three warehousing inventory processes of put away, picking and replenishment.

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